Occasio International Advisory Services (Occasio) is working closely with the company NOVATRADE, a tax consulting company and an import platform dedicated to supporting import, storage and bonded warehousing (Bonded Warehouse). NOVATRADE is led by its Director, Mr. Cyprien Hoffet, and the company has been working in the Brazilian market for several years already, assisting Brazilian companies interested in exporting, and also receiving clients from abroad who need guidance and logistical support in importing products into Brazil.
To contact Mr. Cyprien Hoffet, and learn more about the work of NOVATRADE, see further information below:
NOVATRADE provided this interview below, describing the work they do for clients in Brazil and abroad, and to share a bit of their experience and knowledge from working in the Brazilian market for years now.
Can you briefly introduce Novatrade , and the main services you offer to clients in Brazil and abroad?
NOVATRADE proposes operational solutions for the development of foreign companies in Brazil, including a service of local stock creation.
The company benefits of many advantages like our bicultural approach (European and Brazilian), our polyvalent staff and our methodology that enables us to have a good comprehension of difficulties and needs in Brazil.
According to you, what are the main challenges that foreign companies have to face in Brazil when they want to import or export goods?
Importation and exportation in Brazil is a long and complex process, you need to be patient and not to be discouraged. Understanding administrative stakes and choosing the right partners are crucial to manage the process and to avoid the goods to be kept at customs.
The process is divided into 4 main steps: administrative (procedures and requirements from the government before the importation, such as RADAR or LI), fiscal (tax clearance), operational (logistics part) and payment (currency exchange).
The tax system is very particular, and it needs to be studied very well in order to avoid errors.
How can NOVATRADE help these companies face these challenges?
NOVATRADE can take action in each step of the process. In Brazil, the classification system of goods is different; here the classification is called NCM (instead of the HS Code). NOVATRADE can classify the product of our customer and import goods in Brazil for them through our RADAR (import status authorization). Basically, these types of services are classified as consulting. Our services of trading are much more sophisticated, as we offer our clients the management of the importation and storage of their goods in Brazil.
We are also able to maintain an outsourced subsidiary for them in Brazil, so that they only have to manage the commercial part.
Our list of services is wide and each situation is particular, that’s the reason why communication is very important.
What are some of the key points in the Brazilian tax and legal system which foreign businesses and investors need to know about, and how can they benefit from them?
Before entering into the details of the negotiation with your Brazilian potential buyer, I can advise to check if they have a RADAR. The RADAR is the import status authorization, and without it, the Brazilian buyer won´t be authorized to import directly. In case he doesn’t have a RADAR, you will have to find a trading company to do the importation on his behalf, as NOVATRADE can do, for example.
It’s also very important to check if your product needs a local registration. Some products require to be registered in order to be imported. The NCM classification serves to check this point.
There exists some procedures of tax reduction for some products and equipment. This reduction is called Ex-Tarifario. It deals with a tariff concession for a specific product which is not manufactured in Brazil. This concession leads to obtaining a specific customs classification for your product and reduces the import tax by 2%. Last year we received several requests from customers for help with Ex-Tarifarios, and this helped increase their sales a lot to Brazil, by being more competitive than their competitors.
What kind of advice would you provide a company interested in opening a business in Brazil? What background information do they need to know, and how can Novatrade help them?
First, I think it´s very important to check if the selling price of your product fits the market. Indeed, after paying the import duties and relevant taxes, your subsidiary has to generate a profit. Is this profit sufficient to keep the subsidiary on the road?
Some States offer advantages and benefits in terms of State taxes (taxes called ICMS) for sectors and specific industries they want to reach. That´s very important to be analyzed before choosing where to open your subsidiary in Brazil.
We help our foreigner customers to develop their import business plan and forecast, calculating the import and resell costs for each product, and doing an analysis of fiscal advantage of each State.
A good way to test the market before opening a subsidiary, can be to send products to a Bonded Warehouse for a time, which allows products to be sold to several customers, partners and distributors.
Bonded Warehouses allow foreign companies to store their goods in Brazil without paying local taxes, federal taxes and ICMS on imports. The duties are collected only if the product is sold, and there is low storage costs and optimization of importation costs and quantities. The return of the goods (devolution) to the exporter, or the re-export to another country, can be done without any tax liability.
NOVATARDE manages some Bonded Warehouses and offers solutions that are very competitive to start with and to test the Brazilian market.